View Comments
An ore stockpile at Kanowna Belle. Picture: Jarrod Lucas/Kalgoorlie Miner.
An ore stockpile at Kanowna Belle. Picture: Jarrod Lucas/Kalgoorlie Miner.

Northern Star Resources has bought two major assets from Barrick Gold, in a move which will see the Bill Beament-headed company become Australia's fifth-biggest listed gold producer.

Northern Star this morning told the Australian Securities Exchange that it had purchased Barrick's 51 per cent stake in the East Kundana joint venture as well as the Kanowna Belle mine, both in WA's Goldfields region.

The $75 million deal, which is expected to win Northern Star global investment appeal, comes hot on the heels of the company's purchase of Barrick's Plutonic mine for $28 million.

Today's deal means the local company will be producing 350,000 ounces of gold a year.

The deal would be funded by a combination of cash reserves, debt, a $100 million fully underwritten placement and a non-underwritten share purchase plan to raise a further $15 million.

The raisings will be priced at a discounted 86 cents a share.

The Anton Billis-headed Rand Mining and Tribune Resources hold 49 per cent of the East Kundana project, which is 45km west of Kalgoorlie.

Northern Star said the deal would lift its total gold reserves by 134 per cent to 1.1 million ounces and resources by 43 per cent to 5.6 million ounces with average targeted all-in sustaining costs of less than $1050 an ounce.

Managing director Bill Beament said the deal would promote the company to the premier league of ASX-listed gold producers on every measure.

"The East Kundana JV acquisition makes Northern Star a major Australian gold miner that will appeal very strongly to major global investors," he said.

"The transaction ensures that Northern Star meets the demands of domestic and international investors with respect to critical mass, multiple operations, low costs, consistent dividends and strong growth prospects."

Mr Beament said the acquisition was also consistent with Northern Star's key principle of maximising financial returns.

“We are driven by shareholder returns, not by merely adding ounces and tonnes to our balance sheet and we see this transaction as highly accretive in terms of shareholder value,” he said.

Northern Star shares were in a trading halt having last changed hands for 99 cents.